DTN Midday Grain Comments 03/04 10:57
Soybeans Reaching for the Sky at Midday
Corn is 4 to 5 cents higher, soybeans are 24 to 26 cents higher and wheat is
3 to 5 cents higher.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 110 points. The U.S. Dollar
Index is 0.13 higher. Interest rate products are mixed. Energies are firmer
with crude up $2.80. Livestock trade is mixed. Precious metals are mixed with
Corn trade is 4 to 5 cents higher at midday with trade shaking off poor
export sales to follow soybeans higher. Ethanol margins are seeing support from
energy values and rising world ethanol prices as well as spring driving demand.
Trade will continue to look for further export-sale confirmations as the wire
was quiet again Thursday with marketing-year low sales at 115,900 metric tons
(mt) of old crop and 38,800 mt of new crop. Basis should remain sideways short
term as warmer weather will help to improve movement. Double-crop planting in
Brazil is well underway as well but behind the usual pace. On the May contract,
resistance is the 20-day at $5.46, which we failed to hold above Wednesday,
with the lower Bollinger Band at $5.30 as support, which we bounced off
Soybeans are 24 to 26 cents higher at midday with strong spread action again
as trade works to hold the upper end of the range, while new crop sees gains of
14 to 15 cents Thursday morning. Meal is $2.00 to $3.00 higher and oil is 1.90
cents to 2.00 cents higher. Basis will likely remain flat at strong levels with
slower movement as the export program winds down and a bigger focus is on crush
margins. Brazil should remain rainy in the short term for most as shipments
build up steam with a record long line of ships to load. Argentina remains
mostly dry short term. Weekly export sales were in line with expectations at
334,000 metric tons old crop and 199,400 mt of new crop, 187,400 mt of meal and
5,500 mt of oil. The May chart has resistance at the recent high at $14.45,
with support the 20-day at $13.90.
Wheat trade is 3 to 5 cents higher at midday with range-bound action
continuing short term as trade looks for a spark from weather. The dollar is
just above 91 points on the index, getting back to the upper end of the range
with further consolidation needed to weigh on trade and choppy action so far
this week. The Plains should see warmer weather bringing the crop closer to
exiting dormancy soon with some dry pockets persisting and spotty light rains
possible. KC is at 29-cent discount to Chicago and Minneapolis is at 15-cent
discount. Weekly export sales were soft at 219,200 metric tons of old crop and
23,500 mt of new crop. KC May chart support is the lower Bollinger Band at
$6.11, with resistance the 20-day at $6.35, which we are just below at midday.
David Fiala can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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